Will China's unfulfilled promises of real market reforms finally come to pass? Eyes on the 19th National Congress of the Communist Party, opening on Oct. 18.

BEIJING — It's been going on for months: Chinese authorities have ramped up censorship of the news and on social media as part of a vast operation of political and ideological recalibration. The reason: The 19th National Congress of the Communist Party of China opening on Oct. 18 in Beijing's Great Hall of the People on the edge of Tiananmen Square.

Following months of rumors and backstage maneuvering, a large portion of the ruling team supporting Xi Jinping for his second five-year mandate will be reshuffled. Among others, five out of the seven members of the Politburo Standing Committee, the top leadership of China's Communist Party, will be replaced.

Who will form the new Chinese guard? What will be the new balance of powers among the different political factions? Will Xi Jinping introduce an heir to succeed him in 2022, in accordance with the informal age limit rule, by which a leader who is 68 or over retires at the end of the five-year term? Or will he break with this custom and "Putinize," as some rumors indicate? So many uncertainties.

The National Congress is meant to be an opportunity for the president and secretary general of the Chinese Communist Party to appoint his allies to the Politburo and other key positions. The maneuvering has already begun. To further expand his influence at the party's highest levels, Xi Jingping has already positioned his henchmen in regional agencies and in the central government.

Very early in his presidency, Xi Jinping consolidated his power by considerably expanding his prerogatives. He is now directly in charge of interior policy, security and the economy, greatly encroaching on the duties of Prime Minister Li Keqiang. This consolidation has also turned into the largest anti-corruption campaign China has seen since Mao, serving as an instrument of political purging. Finally, it gave birth to a personality cult around Xi and a tighter grip by the party on all aspects of social life, with an unprecedented crackdown on the rights of activists and lawyers.

But does this crackdown not reveal a certain anxiety at the top? With his desire to monopolize power, Xi Jinping has broken away from the principle of collective leadership and has probably made many enemies.

This model is unsustainable

Moreover, the economic situation is complicated. Growth has been maintained, with GDP up by 6.9% in the first two quarters, practically ensuring that the economy will exceed the annual target of "around 6.5%." And China is no longer a cause of as much concern for investors as it was during the stock market turmoil of August 2015 or even in early 2016. In 2017, a politically crucial year, Beijing has sought to contain financial risks and to maintain the necessary level of activity to safeguard jobs and social stability.

But this model is unsustainable, and the country's growth only stabilized because credit is still flowing. But the total debt, including that of companies, families, the state and local authorities, has topped 260% of the GDP, compared to 140% before the 2008 financial crisis. This credit trajectory is "dangerous," the IMF recently warned, calling once again on Beijing to do much more to rein in the debt.

At the end of May, Moody's also issued a warning, downgrading China’s credit ratings for the first time since 1989. International institutions such as the IMF or the Bank for International Settlements are not the only ones with doubts about China's sturdiness. Wealthy individuals and large companies have been investing overseas, sometimes just to place their money outside of China. Beijing has only been able to contain this capital flight by imposing radical restrictions in late 2016. But these can't last forever.

Faced with this, Beijing has started to slightly tighten its currency policy and reinforce its financial regulation, namely by cracking down on shadow banking. Investigations were opened after the frenzy of overseas acquisitions by big conglomerates (HNA, Fosun, Wanda, Anbang) to assess the risks taken by lending banks. And investments abroad are now under tight control.

But Xi Jinping is faced with a seemingly unsolvable equation: He needs to reduce the country's debt and restructure state-owned companies, but at the same time not halt growth and avoid massive layoffs and social instability. Faced with this fragile balancing act, his first mandate brought neither the promised reforms nor the expected introduction of market mechanisms. The question now is whether they will come in his second term.